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Equities Mixed; DFM Falls on Profit-taking

DUBAI - UAE shares closed mixed on Monday, with the Dubai bourse falling on mild profit-taking, but stocks in Abu Dhabi rose to a three-month high.

The benchmark index of the Dubai Financial Market took a breather, shedding by 0.27 per cent to close at 1,620.60, as heavyweights led by Emaar Properties and Arabtec Holding failed to advance.

The main index of the Abu Dhabi Securities Exchange inched up by 0.54 per cent to 2,555.52, paced by property stocks, which surged by nearly 6 per cent. Index mover Emaar closed flat at Dh2.52, after surging by 6.7 per cent on Sunday. Its competitors, Deyaar Development and Union Properties, advanced by 1.78 per cent at Dh0.57, and by 1.26 per cent at Dh0.80, respectively. Arabtec Holding declined by 2.10 per cent to Dh1.86.

Despite some profit-taking in Dubai, the sentiment is still upbeat, said Ali Khan, managing director of Arqaam Capital Limited.

“Aside from stable global markets, we have a lot of local catalysts such as refinancing deals, along with talks of the Amlak-Tamweel merger finally taking place this month. All these are reviving appetite for risks.”

These refinancing schemes include the $2.2 billion refinancing deal for Dubai Electricity and Water Authority and the refinancing of a $1 billion loan for the Dubai Civil Aviation.

Expectations of a 2010-2011 recovery are gathering momentum, as global stimulus measures start to take effect, said Matthew Wakeman, managing director of cash-and-equity-linked trading at EFG-Hermes.

“For emerging markets to perform well, a high level of risk appetite, coupled with firm commodity prices are required. Risk appetite has risen noticeably in the last few weeks, and basic resources also looked to have turned a corner, with the key driver for the region — oil — rising back above $50 a barrel,” he said. Abu Dhabi’s top property developer Aldar Properties rose by 7.38 per cent, extending its gains to 17.14 per cent in two straight sessions. Second-ranked Sorouh Real Estate advanced by 3.53 per cent to Dh2.64, while RAK Properties edged up by 8.77 per cent to Dh0.62. “Talk that banks are also starting to expand lending again is bringing some long overdue cheer to the real estate sector,” said Wakeman of EFG-Hermes. Banks in Abu Dhabi also lifted that market, led by the National Bank of Abu Dhabi, which climbed by 6.23 per cent to Dh10.40. The National Bank of Ras Al Khaimah added 9.7 per cent to Dh1.47, while commercial bank National Bank of Umm Al Qauwain rose by 4 per cent to Dh3.90.

The National Bank of Umm Al-Qauwain said its first quarter profit increased by 13 per cent from a year ago to Dh110.8 million, driven by a near-doubling in its net interest income to Dh152.9 million. The bank posted an investment loss of Dh11.2 million in the quarter due to weak equities markets in the Gulf, the bank said in a statement.

Dana Gas gained 5.97 per cent at Dh0.73. The company said on Sunday that it began producing gas from the Al Basant discovery in the West Manzala concession in Egypt.

· rocel@khlaeejtimes.com